THE DEAL Business Mankind CORPORATE SOCIAL RESPONSIBILITY Mahavir International Delhi 6550, Main Qutab Road, Nabi Karim, Near Hanuman Mandir, New Delhi [INDIA] (T) , | (M) (E)

Corporate Social Responsibility CSR- Business owes this to the society ‘Corporate Social Responsibility is the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of the local community and society at large’. – World Business Council For Sustainable Development Interpretation (Expectation that business should) Behave Ethically Contribute to Economic Development Improve the quality of life of its workforce and their families Play active part in the improvement of the society This is what it is

Need of the Hour Corporate Social Responsibility Developed countries like Sweden, Norway, Netherland, Denmark, Australia, France has already espouse such practices. India on the path to be a developed nation should also adopt itself with the same. INDIA

Existing 1)Profit Maximization 2)Maximizing shareholders wealth 3)Reinvesting in the Business

Sudden rise of CSR Corporate Social Responsibility CSR-Talk of the Town Factors Mandatory under Law Globalization Increased Expectations of stakeholders Awareness of the limits of Government legislative Awareness of Social and Environmental care

There’s much more to it than we knew ! Myths CSR initiatives may comprise Opportunity Benefits Winning new businesses Enhanced relationship with Stakeholders Attracting, Retaining & Maintaining strong workforce Image Building Access to funding opportunities Increased customer retention Too complicated and Technical Too expensive Mostly a market gimmick Separate corporate initiative Whatever being done is enough Being preventive is enough CSR is like charity Just a Piece of Legislation Employee Focused Initiative Market Focused Product Focused Environmentally Focused Society Focused Develop people’s confidence in your company Strong point of differentiation from competitors Gain foothold in the industry Recognition and support from customers Corporate Social Responsibility CSR – Everything that needs to be known

Section 135 of the 2013 Act Turnover of Rs 1000 Crore or more Net profit of Rs 5 Crore or more Net worth of Rs 500 Crore or more OR Companies Bill Shall constitute a CSR Committee

“Average net profit” shall be calculated in accordance with the provisions of section 198 of the 2013 Act and for deciding the eligibility for CSR expenditure profit of overseas branches and the dividend received from other companies in India will be excluded from net profit criteria. If the Company fails to spend such amount, the Board shall, in its report specify the reasons for not spending the amount Corporate Social Responsibility Responsibility of the Board Ensure that the activities are undertaken by the company Approve the CSR Policy & disclose contents in its report & also place it on the company’s website Ensure that company spends, in every financial year, at least 2% of the average net profits made over 3 preceding years

Schedule VII (Activities Covered) 1 Eradicating hunger and poverty 2. Promoting education 3. Promoting gender equality and empowering women 4. Reducing child mortality and improving maternal health 5. Combating HIV,malaria and other diseases 6. Ensuring environmental sustainability 7. Employment enhancing vocational skills 8. Social business projects 9. Contribution to the Prime Minister's National Relief Fund or other funds set up by the CG or the SG for socio-economic development 10. Company shall give preference to the local area and areas around it where it operates 11. Livelihood enhancement projects 12. Steps for benefit armed forces veterans

Money spent for the benefit of the company’s employee (and their families) [As they would be considered as perquisites.] Surplus arising from the CSR programmes /activities shall not form part of business profits. Funds given to political parties directly or indirectly (Activities Not Covered) The CSR Activities must be within India and also apply on foreign companies registered here

Failure to explain is punishable by a fine on the company of not less than 50,000 rupees (about U.S. $900) and up to 25 lakh rupees (about U.S. $46,000). Further, officers who default on the reporting provision could be subject to up to three years in prison and/or fines of not less than 50,000 rupees (about U.S. $900) and as high as 5 lakh rupees (about U.S. $9,200). Failing to spend on CSR under the 2 Percent Formula, a company and its officers are subject to liability for not explaining such a failure in the report of the board of directors. Discretionary Power in the hands of bureaucracy Draconian Law

An enforcement mechanism or penalties for non-compliance There is no discussion of what explanations would be legally valid, opening up much room for corruption and extortion. There is no validation for the CSR spend to be genuine CSR in India is dominated by the philanthropic approach rather than a collaborative approach If the 2 percent allocation is not made in a given fiscal year, the CSR committee has to submit an explanation to avoid being penalized Flaws in Laws

Now a Million dollar Question How to spent money?

If Project cost is higher, then one or more companies can join hand.

 Experience and exposure  Requisite infrastructure and resources  Suitable Manpower  Work Culture  Dedication (Main Stream)  Experience and exposure  Requisite infrastructure and resources  Suitable Manpower  Work Culture  Dedication (Main Stream)

Health Care Facilities

 Experience and exposure  Requisite infrastructure and resources  Suitable Manpower  Work Culture  Dedication (Main Stream)  Experience and exposure  Requisite infrastructure and resources  Suitable Manpower  Work Culture  Dedication (Main Stream)  Trust & Credibility  Transparency  Proven Track Record  Highly Professional Think Tank having passion to serve  Moto : ” Serve All Love All ”  Service with Smile  Approach to Deliver Comprising Bureaucrats, IAS, IPS, IRS, IC&CES, DANICS, Doctors, Professionals, Industrialists, Social Workers, Administrators.

By Anil Kr. Jain Vice Chairman (E) Mahavir International Delhi